Backbone Rock, known locally as the "Shortest Tunnel in the World," was blasted and drilled around 1908 by the Beaver Dam Railway Company to give railroad access from Damascus to Shady Valley's manganese and iron ores and timber. Over the next twenty years, the area's privately owned timber was cut over twice and damaged by a devastating fire, while its minerals were nearly exhausted by available mining methods. In 1911, as conservation efforts advanced, Congress enabled the federal government to acquire land for a developing eastern national forest system, and Backbone Rock with 20,000 surrounding acres was purchased as part of Tennessee's national forest lands. Beaver Dam's railroad tracks were removed in 1924, the route was opened to automobiles, and the tunnel was widened in 1930 for two-lane traffic, increasing access for recreation. During the 1930s, three of Roosevelt's New Deal public works programs helped develop the recreation areas, and features from that era, including two covered picnic shelters and rustic flights of steps on nearby trails, remain in use. A second round of improvements, including the nearby campground, came in the 1960s under the Accelerated Public Works program, and the USDA Forest Service has managed the public lands at Backbone Rock since the nineteen-teens. The wider railroad network also transformed the region around the turn of the 20th century, as the Virginia-Carolina Railway expanded from Abingdon through Damascus toward the Virginia-Tennessee state line, Beaver Dam Railroad Company extended the line to Crandull by 1901, and within eight years another six miles of standard gauge track reached Shady Valley through the Crandull and Shady Valley Railway. Built largely with private lumber investment, these lines linked Shady Valley to Damascus for fifteen years by carrying mail, passengers, and harvested natural resources along routes that paralleled Beaverdam Creek, reducing the valley's isolation among the Holston and Iron Mountain ranges; parts of those former rail lines now survive as modern transportation and recreation routes, including the Virginia Creeper Trail.